Daily Current Affairs MCQ / UPSC / IAS / 23-10-19

Table of Contents

MCQ 1

It is the prerogative of the States to define their own criteria and define tracts of land as a forest which is known as ‘deemed forests’
Forests defined under these criteria constituted about 10% of the country’s forests

Choose correct

(A) Only 1
(B) Only 2
(C) Both
(D) None

Definition of land as forest

The conundrum of defining forest has been around since the 1980s.
In 1996, the Supreme Court in its Godavarman Judgement expanded the definition of Forest that includes lands,
That was already notified by the Centre as forests,
That appears in government records as forests
That fell in the “dictionary definition” of forest.
Under the third category, it is the prerogative of the States to define their own criteria and define tracts of land as a forest which is known as ‘deemed forests’.
This is because, a tract of grassland in one State might qualify in one region as forest, but not in another.
However, not all States have submitted such criteria and once a State applied criteria, it couldn’t be reversed.
Forests defined under these criteria constituted about 1% of the country’s forests.
The discussion on this deemed forests came up because the Uttarakhand government had put forth a set of criteria defining forest land and asked the Environment ministry for it’s opinion.
The Forest Advisory Committee (FAC) have clarified that the States need not take the Centre’s approval to define what constitutes unclassified land as forest.

MCQ 2

Prime Minister’s Economic Advisory Council is a non-constitutional but permanent and independent body
It is chaired by finance secretary for 5 years

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(A) Only 1
(B) Only 2
(C) Both
(D) None

PMEAC

Prime Minister’s Economic Advisory Council is a non-constitutional, nonpermanent and independent body constituted to give economic advice to the Government of India, specifically the Prime Minister.
The council serves to highlight key economic issues facing the country to the government of India from a neutral viewpoint.
It is chaired by a Chairperson and consists of eminent economists as members.
There is no fixed definition on the exact number of members and staff of the EACPM.
Recent developments – It was recently reconstituted for the period of two years.
In the council’s earlier terms, there were 5 full time and part time members in total. After the reconstitution, the strength of the council gone upto 7 with 2 full time and 5 part time members.
Bibek Debroy remains the chairman of the PMEAC and Ratan Watal its MemberSecretary.

MCQ 3

IMF quotas are distributed according to country’s contribution in IMF funds
India’s quota is 6.41%

Choose correct

(A) Only 1
(B) Only 2
(C) Both
(D) None

None Developments in IMF

The members of IMF has recently agreed a new deal that would allow to maintain its funding at $ 1 trillion but postponed changes to its voting structure.
Source of funding in IMF – Quotas are the IMF’s main source of financing. Each member of the IMF is assigned a quota, based broadly on its relative position in the world economy.
Through New Arrangement to Borrow (NAB), a number of member countries and institutions stand ready to lend additional resources to the IMF.
The NAB constitutes a second line of defense to supplement IMF resources.
Bilateral Borrowing Agreements serve as a third line of defense after quotas and the NAB.
Concessional lending and debt relief for low-income countries are financed through separate contribution-based trust funds.
NAB is a renewable funding mechanism that has existed since 1998 and bilateral borrowings from countries after the 2008 financial crisis.
Recent Developments – In its new deal, IMF members have decided to extended the bilateral borrowing facility by a year to the end of 2020 and a potential doubling of the NAB.
But the new deal will leave IMF quotas (the primary source of IMF funds), which determine voting shares, unchanged. Instead, these will be reviewed before the end of 2023.
This is mainly due to veto power of US which has objected to changing IMF quota.
IMF quotas are distributed according to a four pronged formula that considers a member country’s GDP, its economic openness, its “economic variability” and international reserves.
India’s quota is 2.76% and China’s is 6.41%, while the U.S.’s quota is 17.46 % (translates to a vote share of 16.52%).
Many of the crucial decision in IMF requires 85% supermajority and US vote share give it unique veto power

Where the IMF Gets Its Money

Resources for IMF loans to its members on non-concessional terms are provided by member countries, primarily through their payment of quotas. Multilateral and bilateral borrowing serve as a second and third line of defense, respectively, by providing a temporary supplement to quota resources. These borrowed resources played a critical role in enabling the IMF to support its member countries during the global economic crisis. The IMF’s current total resources amounting to about SDR 975 billion translate into a capacity for lending or “firepower” of about SDR 715 billion (around US$ 1 trillion), after setting aside a liquidity buffer and considering that only resources of members with strong external position are used for lending.

Quotas

Quotas are the IMF’s main source of financing. Each member of the IMF is assigned a Quota, based broadly on its relative position in the world economy.
The IMF regularly conducts general reviews of quotas to assess the adequacy of overall quotas and their distribution among members. The latest review (the 14th Review) was concluded in 2010 and the quota increases became effective in 2016. This review doubles quota resources to SDR 477 billion (about US$660 billion). On December 5, 2016, the Board of Governors adopted a Resolution calling on the Executive Board to work expeditiously on the 15th Review in line with existing Executive Board understandings and the guidance provided by the IMFC, with the aim to complete the 15th Review by the Spring Meetings of 2019 and no later than the Annual Meetings in the fall of 2019.
40 participants
Total size SDR 182 billion (US$250 billion)
Activation requires support from 85% of creditors eligible to vote
Activated ten times between April 2011 to February 2016
Last activation ended in February 2016
Renewed for an additional five-year period through November 2022
Through the New Arrangements to Borrow (NAB) a number of member countries and institutions stand ready to lend additional resources to the IMF. The NAB constitutes a second line of defense to supplement IMF resources to forestall or cope with an impairment of the international monetary system. Concurrent with the quota increases under the 14th Review, the NAB was rolled back from SDR 370 billion to SDR 182 billion in February 2016
40 participants with approved 2016 Borrowing Agreement
Total commitments of about SDR 317 billion (US$440 billion)
Activation of the agreements requires support from 85% of creditors eligible to vote
Common initial term to end2019, extendable to end-2020 with consents from lenders
Bilateral Borrowing Agreements serve as a third line of defense after quotas and the NAB. Since the onset of the global financing crisis, the IMF has entered into several rounds of bilateral borrowing agreements to ensure that it could meet the financing needs of its members. In 2016, in view of continued uncertainty in the global economy, the membership committed to maintain access to bilateral borrowing, under a revised borrowing framework, with an initial term through the end of 2019 extendable for a further year with creditors’ consents. Concessional lending and debt relief for low-income countries are financed through separate contribution-based trust funds.

MCQ 4

As per the RBI Act, the central bank should have one governor and four deputy governors
Financial Sector Regulatory Appointment Search Committee (FSRASC) is headed by Prime Minister

Choose correct

(A) Only 1
(B) Only 2
(C) Both
(D) None

Appointments in RBI
As per the RBI Act, the central bank should have one governor and four deputy governors -Two from within the ranks and one commercial banker and another an economist to head the monetary policy department.
Any vacancy in the list will be filled by the government after getting recommendations from the Financial Sector Regulatory Appointment Search Committee (FSRASC).
FSRASC is headed by Cabinet Secretary and includes additional Principal Secretary to the Prime Minister who is a permanent government nominee and 3 other experts.
As per the process, the panel will invite applications from eligible candidates and based on interactions with them will select the candidate.
The appointment would be made by the central government on the recommendation of the FSRASC.
It is noted that the FSRASC is free to identify and recommend any other person also, on the basis of merit, who has not applied for the post.
The same process is being followed in the selection of Chairman of SEBI and IRDAI.
Currently, Deputy governor post in RBI is being vacant after the resignation of Viral Acharya.
The tenure of the office is three years and the person is eligible for reappointment.

MCQ 5

Bhashan Char Island is located in

Arabian Sea
Pacific Ocean
Indian Ocean
Bay of Bengal

The Rohingya refugees living in Bangladesh camps have agreed to move to Bhashan Char Island in the Bay of Bengal.
The island is also known as Thengar Char Island.
Bhashan Char island was formed about two decades ago on the mouth of river Meghna.
The uninhabited island is located around 30 kilometres east of Hatiya island in South-East Bangladesh.
Bangladesh wanted to move 100,000 Rohingya refugees to the muddy silt island to take the pressure off the overcrowded border camps.
The Bhashan Char falls in an ecologically fragile area prone to floods, erosion and cyclone.
Though the Bangladesh government has built a three-metre-high embankment along its perimeter to keep out tidal surges during cyclones.

MCQ 6

Section 11 in The Representation of the People Act, 1951 talks about

Use of Money in Election
Restrictions on Exit poles
Asset declaration of Candidates
Removal or reduction of period of disqualification.

Criticisms wrt to Section 11, can this decision be justified and what’s the way out?
Context: Delhi High Court has sought a response from the Centre and the Election Commission (EC) on a petition challenging the EC’s decision to reduce the disqualification period of Sikkim Chief Minister Prem Singh Tamang from six years to 13 months.
This was done in accordance with the Section 11 of Representation of the People Act.
Mr. Tamang was convicted of the charge of misappropriation of public funds. His disqualification period of 6 years, which began on August 10, 2018, was to end on August 10, 2024.
It is based on Mr. Tamang’s main argument. According to him, the law prevailing at the time of his offence entailed disqualification only if the sentence was for a term of two years or more; and that the amendment in 2003, under which any conviction under the anticorruption law would attract the six-year disqualification norm, should not be applied to him.

Section 11 of the RP Act:

The Election Commission may, for reasons to be recorded, remove any disqualification under this Chapter 1 (except under section 8A) or reduce the period of any such disqualification.
While this may seem to be an innocuous condonation, the fact that condonation was granted just before the fresh state elections were to be held, demonstrates arbitrariness. The only inference from the period condoned, that is, four years 11 months, seems to be for the specific purposes of allowing the candidate to contest the state elections.
Therefore, it is also argued that Section 11 of the Representation of the People Act, 1951, was unconstitutional since it provided uncanalised, uncontrolled, and arbitrary power to the Election Commission to remove or reduce the disqualification period.
This is morally wrong and a dangerous precedent that may end up reversing the trend towards decriminalizing politics.
Under Section 11 of the Representation of the People Act, 1951, the EC indeed has the power to remove or reduce the disqualification attached to a conviction. However, this has been used rarely, and seldom in a case involving a conviction for corruption.
Its because Disqualification from contest is a civil disability created by electoral law to keep those convicted by criminal courts from entering elected offices. It is not a second punishment in a criminal sense.
The EC decision also goes against the grain of a series of legislative and judicial measures to strengthen the legal framework against corruption in recent years.

Need of the hour:

The apex court has already described corruption as a serious malady and one impinging on the economy. In 2013, the protection given to sitting legislators from immediate disqualification was removed.
Now, disqualification should be more strictly applied to those convicted for corruption. Legislators handle public funds, and there is good reason to keep out those guilty of misusing them.

MCQ 7

Global Wealth Report is released by The Credit Suisse Group, USA
The richest 10% own 82% of global wealth and the top 1% alone own 45%.

Choose correct

(A) Only 1
(B) Only 2
(C) Both
(D) None

The Credit Suisse Group, a Switzerland-based multinational investment bank, has released the 10th edition of its annual Global Wealth Report.

How is wealth defined and calculated?

Wealth is defined in terms of “net worth” of an individual. This, in turn, is calculated by adding up the value of financial assets (such as money) and real assets (such as houses) and then subtracting any debts an individual may have.

Key findings:

China has overtaken the United States this year to become “the country with most people in the top 10% of global wealth distribution”.
44% of total wealth with 0.9%: 47 million people – accounting for merely 0.9% of the world’s adult population – owned $158.3 trillion.
Bottom half of wealth holders collectively accounted for less than 1% of total global wealth in mid-2019, while the richest 10% own 82% of global wealth and the top 1% alone own 45%.
Global financial crisis of 2008-09 has hurt those at the bottom of the pyramid more than the wealthiest as inequalities within countries grew in the wake of the GFC. As a result, the top 1% of wealth holders increased their share of world wealth.

India remains one of the fastest wealth creators in the world, with household wealth in dollar terms growing faster than any other region.
.Wealth per Indian adult is at $14,569 ( ₹10.31 lakh as on 21 October). However, the average number is skewed heavily by a few wealthy individuals.
India accounts for 2% of the world’s millionaires.

What are the drivers of the wealth of nations?

Overall size of the population: A country with a huge population, in terms of final calculation, this factor reduces the wealth per adult. Also, a big population provides a huge domestic market and this creates more opportunities for economic growth and wealth creation.
Country’s saving behaviour: A higher savings rate translates into higher wealth. Overall, a percentage point rise in the savings rate raises the growth rate of wealth per adult by 0.13% each year on average.
General level of economic activity as represented by aggregate income, aggregate consumption or GDP: The expansion of economic activity increases savings and investment by households and businesses, and raises the value of household-owned assets, both financial and non-financial.